Tesla to buy energy tech company Maxwell Technologies for about $218 million

Tesla to buy battery-tech firm Maxwell for $218 million in stock

A Tesla dealership in Berlin Germany

A Tesla auto is seen in Santa Monica, California, United States, October 23, 2018.

Tesla does not invest lightly, as can be seen with its acquisition of Grohmann Automation, which gave it a competitive advantage and a way to maximize automation in the Tesla Model 3 production lines to get the auto to scale faster.

Clearly, however, the technology is still an area of interest for Musk and his company, and was a motivating factor in the acquisition of Maxwell.

Maxwell shares enjoyed a boost after the announcement while Tesla remained fairly steady.

Ultra- or super-capacitors have been creating quite a buzz in energy storage circles for some years now, for their ability to provide quick surges of power and to survive more charge and discharge cycles than a battery.

Volvo-owner Geely Holding Group last May announced a deal with Maxwell and described the company's ultracapacitor technology as helping to deliver "peak power" for hybrid cars. If Tesla can be the first to bring the next generation of battery technology to market, that could allow it to bring higher energy density batteries to customers at a lower cost and at lower weights, all while increasing the speed of charging. Last week Maxwell's stock traded at just over $3.00 per share for a valuation of $140 million, Tesla has paid $4.75 per share making the transaction worth over $200 million.

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Maxwell executives told investors in January that it had developed and patented a "dry electrode" technology that could significantly increase the driving range and reduce the cost of electric vehicle batteries.

Currently, Japan's Panasonic Corp is the exclusive battery cell supplier for Tesla cars.

"I'm a big fan of ultracapacitors", Musk once tweeted.

The SpaceX CEO even went as far to disclose that he was planning to do a Ph.D. at Stanford on the technology but abandoned that plan for the life of a serial entrepreneur. Supercaps are also used to store massive amounts of electricity in national power grids.

The companies expect the deal to close in the second quarter of the year, pending customary closing conditions.

DLA Piper was Maxwell's outside legal counsel, while Barclays Capital was the independent adviser.

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